South Korea’s leading fixed-line telecom carrier, KT, Thursday plans to sign a 360 million won ($380,000) outsourcing contract in Pyongyang with a North Korean institute to develop six sophisticated software programs.

A Ministry of Unification official said Wednesday two KT executives went via Shenyang, China, to the North Korean capital to sign the deal with the North’s Samcholli General Corp.

However, when contacted, KT refused to confirm the contract.

Nonetheless, the ministry official, who declined to be named, said: “Samcholli will develop six computer programs in such fields as next-generation networks and voice recognition for 360 million won by the end of this December.”

“Plus, they are to agree to launch a pilot run of valued-added processing this year with a pair of telecom products _ polyvinyl chloride (PVC) coffins and splitters,” he said.

Under the envisioned agreement on the valued-added processing, KT will provide raw materials to Samcholli, which will manufacture the products in return for some commissions.

The official said the range of valued-added products will be substantially expanded next year should this year’s trials proved successful.

Asked whether the step will be an issue given the North’s soured relationship with Seoul over the recent test-firing of seven missiles, the unnamed official flatly rebuffed such concerns.

“Basically, we think this kind of Inter-Korean cooperation between private entities should continue regardless of political landscapes,” he said.

“In addition, this is a commercial contract, not one aimed at helping the North. If Samcholli fails to meet requirements of KT, the latter can refuse to pay the promised money,” he added.

Indeed, KT struck a similar deal with Samcholli last year and the former state monopoly paid 164,000 euros (nearly 200 million won) only after Samcholli finished developing the telecom software as scheduled.